11 December 2020

Key insights

Germany – Australian logistics companies in Europe that manage pallets and containers have experienced a massive jump in turnover thanks to increased demand for shipping. The growth in some sectors – such as food and beverages – has more than compensated for the slump in others, including automotive. Currently, forecasts remain strong. 

Sweden – Swedish steel maker SSAB has opened a demonstration ‘green steel’ facility that uses hydrogen instead of metallurgical coal. SSAB aims to produce fossil-fuel free steel commercially by 2026, initially for the European automotive industry. SSAB currently imports A$300 million of thermal coal per year. 

UK – The anticipated Australia–UK Free Trade Agreement, currently under negotiation, has the support of UK’s peak business organisation, the Confederation of British Industry (CBI). According to reports, CBI members have demonstrated particular interest in expanding opportunities in space, advanced manufacturing, and food and beverages. 

UK – The UK will dramatically increase spending on defence procurement, with an additional £16.5 billion over the next four years (see below). Space, cyber and naval shipbuilding are the principal beneficiaries. Investment in new technologies and capability will create major partnership, collaboration, investment and research opportunities for Australian DAMS and tech companies.

Market opportunities

Health

Czech Republic – The Training Pillar of the Government’s new Alzheimer Disease Action Plan 2020–2030 will showcase Australian training innovations including virtual reality ‘VR EDIE’ by Dementia Australia and the ‘Understanding Dementia’ e-learning massive open online course (MOOC) by the University of Tasmania. This indicates receptiveness to Australian VR med-tech in some EU markets. 

Switzerland – Novartis has signed an exclusive US$50 million worldwide licence and collaboration agreement with Australian (VIC) regenerative medicine company,Mesoblast.

UK – COVID-19 has prompted significant changes to UK obesity policy, including new restrictions on advertising and the promotion of foods high in fat or sugar. Pressure will continue on food manufacturers to reformulate and offer healthier foods. This could present opportunities and challenges for Australian exporters seeking improved access to UK markets when UK leaves the EU Customs Union in December.

UK – The UK Health Minister has signalled thatsome NHS changes introduced to cope with the pandemic will likely become permanent – including remote consultations. This creates potential opportunities for Australian telemedicine and remote diagnostics companies. 

Defence

France – Airbus has unveiled its roadmap for a zero-emission aircraft by 2035. Three concepts are under consideration. Hydrogen would be used for the aircraft model that is due to replace the A320 aircraft as well as for a disruptive, long-range, flying wing aircraft. This strategy would require heavy investments to accommodate for the distribution of hydrogen in airports.

UK – UK Prime Minister Johnson announced the biggest program of investment in British defence since the end of the Cold War. This involves an overall cash increase of £16.5 billion over four years. The commitment will enable the Government to invest in cutting-edge technology, positioning the UK as a global leader in domains such as cyber and space. To support these advancements the government will establish a new agency dedicated to Artificial Intelligence, a new National Cyber Force, and a new ‘Space Command’, capable of launching its first rocket in 2022.

UK – There are growing opportunities for Australian cybersecurity and technology companies to work with the UK Government, and defence and security agencies. The National Cyber Security Centre (NCSC) – part of Government Communications Headquarters (GCHQ) – has reported a surge in cyberattacks and incidents this year. Protecting the NHS and health-related research is currently a major priority for the NCSC.

UK – The UK Defence Industry Association, ADS,says its memberssee Australia as a ‘friendly’ market and have noted recent defence commitments. While COVID-19 has accentuated some of the logistics challenges ofengaging with Australia, Austrade UK’s Defence Director will work with ADS on joint venture and partnership opportunities.

Technology & manufacturing

Austria – Australia has been invited to present its digitisation strategies during the annual summit of Austrian Platform Industrie 4.0, which this year will take place virtually on 10th December form 10.30am (CET). The event will discuss transfer technology, best practices and new business models, and explore the potential for joint research to support digital transformation processes. The Australian presentations will start at 12pm CET. 

Poland – Warsaw has been identified as one of the emerging European hotspots for data centre development. Warsaw attracts considerable investment from the hyperscalerswith growth expected to double over the next five years.

Europe – The proposed ‘Next Generation’ EU fund will include financial coverage for the EU’s flagship research program Horizon Europe (worth €80.9 billion) and an increase in the Erasmus+ mobility program budget (to €21.2 billion) for the next seven years. Australia is considering associate membership of Horizon Europe, and is already a partner in Erasmus+. The recovery program includes the development of a digital education agenda to promote digital skills among EU citizens.

Germany – Digital design companies operating in Europe report that many SMEs are prioritising updates to their online presence. Business is therefore strong, with growing demand for freelance web designers. This may provide opportunities for Australia-based web designers. 

UK – There are growing opportunities to export electric vehicle (EV) batteries and charging-station technologies to UK. Sales of hybrid electric vehicles are currently up 56%, year-on-year; plugin hybrid electric vehicles are up 139%; and battery electric vehicles, 184%. Austrade has identified multiple public opportunities for Australian companies related to electric vehicles charging points in England, Ireland and Wales.   

Resources & energy

Sweden – LKAB (Sweden’s state-owned iron ore miner) is diversifying into critical industrial minerals. It has announced a letter of intent with Australia’s Talga Resources to develop a lithium-ion battery anode-production facility and integrated graphite-mining operations in northern Sweden. Early this year LKAB announced it was investing A$8 million in a pilot plant for extracting rare-earths in northern Sweden. At full production this plant would provide 30% of Europe’s current demand for rare–earths.

UK – The UK’s National Infrastructure Strategy was unveiled this week detailing ambitious energy commitments. Measures to improve the UK's green infrastructure include the creation of a UK infrastructure bank, a ramping up of electric vehicle (EV) policy and funding for hydrogen and carbon-capture and storage (CCS). Major highlights for Australian industry include £1 billion committed to bring forward four CCS clusters by 2030 and another £800 million being set aside for the creation of the CCS Infrastructure Fund. Hydrogen, meanwhile, is to benefit from a £240 million Net Zero Hydrogen Fund.

UK – The Offshore Wind Growth Partnership is launching a £2 million package of funding and business-support activities for the UK offshore wind supply chain. This includes two new funding calls as well as intensive business transformation support activities through the £1.5 million ‘Sharing in Growth Program’. The UK currently has the world’s largest installed capacity of offshore wind power, providing multiple opportunities for suppliers in Australia’s renewable sector.

UK – The UK’s Critical Mineral Association plans to create a £1 billion public/private partnership fund to secure the UK critical mineral supply chain. The fund aims to build an alternative supply chain for critical minerals through the UK and its partner nations, and it wants this supply chain to be clean, green, secure, ESG-compliant, responsibly sourced and vertically integrated. The association is keen to collaborate with Australia, as it is specifically looking to invest in friendly jurisdictions.

Food & Agri

UK – Post has identified a potential challenge for Australian fruit producers looking to enter the UK market. Post has been promoting Tasmanian cherries to UK grocery retailers, but initial feedback from several major buyers shows a current preference for suppliers from countries such as Chile and Argentina for seasonal fruits.

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